Eco-Logistics Hub to Improve Operational Efficiencies in North Vietnam

Traffic Congestion at Hai Phong

Traffic congestion at North Vietnam’s Hai Phong port, and the roads leading to it have resulted in spiraling inland trucking costs, delayed transit times, and alarmingly high levels of CO2 emissions. The overall logistics costs are also painfully high because of rising toll fees, hours of idle truck time spent waiting for container pick up and drop off at the port, uncontrollable trucking lead time, and inordinate custom clearance delays.

Traffic jams heavily overload Vietnam’s roads and inflict significant damage to the environment, violating Vietnamese citizens’ right to a clean, pollution-free life. Moreover, logistics companies are unable to maximize their operational efficiencies since inland trucking is the only option, with a maximum of one container per trip, per day being achieved.

Damco’s Answer to Hai Phong’s Traffic Woes

As part of its structured customer discovery process, we conducted an internal survey amongst our top 30 customers operating in the Bac Ninh area. Results showed that cost saving was the top priority for customers, followed by energy savings, time saving, reducing Co2 emissions and reducing traffic jams.

Our commercial think-tank in Vietnam proposed a “modal shift” solution for transport and custom clearance by building an Eco-Logistics Hub at Que Vo, Bac Ninh. With the roads becoming saturated, it makes sense to replace the high-volume road-only traffic with barge transport. Bac Ninh, being home to some of the top global manufacturers, accounts for nearly 60% of the container volumes. This Hub seeks to connect the Bac Ninh region with the Hai Phong port via barge operations, thereby opening up possibilities of mass barging transportation and in turn, reducing port and road congestion.

In the long-term this sustainable solution aims to reduce trucking lead time, usher in convenience and curtail overall logistics costs for enterprises. It also offers customs clearance services located right next door. Ultimately, this makes the region more attractive and competitive from a business perspective. Key customer and partner segments including shipping lines, trucking companies, import and export enterprises, multinational companies (MNC), as well as manufacturers, wanting to make Bac Ninh a hub for their industrial operations are all likely to benefit from these improvements.

Stay Ahead with Damco’s Eco-Logistics Hub

Our Eco-Logistics Hub helps keep its customers, partners, and resources one step ahead of the market developments. This solution brings in mass barging transport service to generate economies of scale (96 – 120 TEUs per barge), lower logistics costs and reduce unnecessary time consumption. It also reduces the carbon footprint thereby complying with the government’s go-green initiatives.

Quick Turnaround Time (TAT) to lower overall logistics costs by ensuring quicker turnaround time to ports, saving at least one round of trucking and storage capacity at the factory and warehouses

Cost reduction that are cheaper than the current trucking solution, providing a ready-to-export handover at Hai Phong port

Traffic reduction leads to a reduction in traffic congestion which means lower transit delays, toll fees and trucking idle time

Carbon footprint reduction through mass barging leads to reduced traffic congestion, and fewer rounds of trucking, resulting in seamless alignment with corporate and national environmental goals

The Eco-Logistics Hub is a first-of-its-kind solution to North Vietnam’s Hai Phong port hinterland traffic congestion and operational inefficiencies. To find out more about how you can stay ahead in your supply chain endeavors in North Vietnam, please connect with Damco’s local office here.

Tong Thach Chuong is the Area Chief Commercial Officer for Damco Vietnam/Cambodia/Myanmar. He is responsible for developing commercial strategies resulting in enhanced customer satisfaction through service quality and operational excellence. He is also involved in promoting trade lanes, global freight networks and Contract Logistics at Damco. Chuong has a vast experience of more than 25 years in Logistics & Supply Chain Industry in Vietnam holding leadership positions in Operations, Commercial & General Management divisions. Before joining Damco, Chuong has been part of Sonion (Denmark), DHL Supply Chain (Germany), Sembcorp - Temasek Holding (Singapore) and RCL shipping lines (Thailand).

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